Foreign Relations of the United States, 1969–1976, Volume E–10, Documents on American Republics, 1969–1972

548. Memorandum From the President’s Assistant for National Security Affairs (Kissinger) to President Nixon¹ ²

Washington, June 18, 1971

SUBJECT:

• Panama Canal Treaty Negotiations

Ambassador Anderson has replied to your letter of March 1 (Tab E) asking his views on whether to proceed with treaty negotiations on the Panama Canal and what should be our specific negotiating objectives. A copy of Anderson’s reply (Tab D) was given to the NSC Under Secretaries Committee for coordination of agency views, which we now have (Tab C). There is general agreement on most of the negotiating goals and objectives. I have summarized for you at Tab G those on which there is no dispute. They are in accord with your decisions on Panama Canal negotiations in NSDM 64 (Tab F) and present no problem. However, your decision is required on three major issues:

I. WHETHER OR NOT TO PROCEED:

Ambassador Anderson and the agencies believe a draft treaty can be obtained in time to submit it to the Senate late this year or early in 1972. This belief is based on the apparent willingness of the Panamanians to concede our two non-negotiable points: the right to defense of the Canal, and control of its operations. Moreover, the distinction between preliminary talks and negotiations has not been meaningful to the Panamanians, who would probably react adversely if we backed out at this point. In other respects, the prospects are not favorable, however. General Torrijos, the de facto ruler of Panama, is nationalistic, erratic, and emotional. His negotiating flexibility has also been circumscribed because he has taken some of the issues in the negotiations to the people in an effort to build popular support for his position. It is thus possible that the negotiations may reach an impasse and we may be unable to agree on a satisfactory draft treaty by the Fall, which is the latest we can afford if the treaty is to be presented to the Senate before the 1972 election campaign. A contingency plan to cover this eventuality is being prepared. Despite the uncertainties, however, I concur with the judgment of Anderson and the agencies that it is in our interest to proceed with the negotiations.

Recommendation:

That you authorize Ambassador Anderson to proceed with negotiations.

II. DURATION OF NEW TREATY

This question is the main focus of agency disagreement. The various positions are as follows:

—NSDM 64: An open-ended treaty was considered preferable, but not included among our non-negotiable goals.

—State and Ambassador Anderson: An open-ended treaty is probably not obtainable and we will have to settle for a treaty of fixed duration as we did in the 1967 drafts. State specifies 50 years in its position. (Ambassador Sayre in Panama, on the other hand, believes that the Panamanians will accept an open-ended treaty providing we are generous enough in the area of economic benefits and on the jurisdiction issue.)

—Defense: Control over the lock-canal for an open-ended period, or until the U.S. constructs a sea-level canal. Defense feels there is a chance for an open-ended treaty providing we give up enough in other areas, especially jurisdiction. DOD also believes it would be difficult to obtain Senate approval for a fixed-term treaty. It therefore prefers that Anderson not be authorized to negotiate a fixed-term duration without further instructions from you.

I favor the DOD position, with the understanding that you would be prepared to consider falling back to a fixed-term treaty if and when Anderson concludes that would be necessary to achieve our other major negotiating objectives. You could assure Anderson that you would be prepared to respond rapidly at that point, without lengthy bureaucratic delay. This issue is essentially tactical: State and Anderson are prepared to fall back now, but it is not certain that will be necessary, especially if we are prepared to concede substantially to the Panamanians on the questions of jurisdiction and economic benefits.

Recommendation:

That you instruct Anderson to continue to seek an open-ended treaty, and return for further instructions if and when he concludes that he must fall back to a fixed-term treaty to achieve our other major objectives.

Approve
Disapprove, prefer State/Anderson position

III. THE JURISDICTION ISSUE

The elimination of the “government-within-a-government”, which U.S. jurisdiction over the Canal Zone represents, is Panama’s primary negotiating goal aside from increased economic benefits. Ambassador Anderson and the agencies agree that we are unlikely to be able to retain exclusive jurisdiction over the Zone for the life of the treaty, and that therefore a phased turn-over of jurisdiction to the Panamanians will be necessary to allow time (a) for Panama to improve its own capabilities, and (b) to give the American residents time to accustom themselves to increased Panamanian jurisdiction. The key issue is what minimum period for phase-out of jurisdiction should we be prepared to accept. An important factor is Congressional sensitivity on this issue. The various positions are as follows:

—NSDM 64: Retention of sufficient jurisdiction in the present Zone to assure effective defense and efficient operation of the Canal. The question of exclusive jurisdiction was not considered non-negotiable. (You reinforced this position in your conversation last October with President Lakas when you expressed sympathy for Panama’s aspirations on the jurisdiction question.)

—State: Opening position: Phase-out of U.S. jurisdiction within a minimum of twenty years. Fall-back position: Give Anderson flexibility to obtain the best deal he can on jurisdiction, consistent with our other negotiating objectives and Congressional acceptance. (This is Anderson’s preferred position.)

—Defense: Opening position: Same as State. Fall-back position: Anderson should return for further instructions if Panama will not agree to 20-year phase-out.

I favor the State position. This is the key issue for the Panamanians, and we will have to be prepared to give on this in order to obtain our principal objectives—control over defense and operation of the Canal. Anderson is sensitive to Congressional feeling on this subject. Moreover, I do not think he will be prepared to stay on the job if he does not have flexibility on this issue.

Recommendation:

That you approve the State position.

Approve
Disapprove, prefer Defense position

I understand that Ambassador Anderson is unhappy because he has not been invited to meet with you to brief you on his views and be reassured of your personal confidence in him. There is some risk that Anderson may resign if he does not have an opportunity to meet with you or if he is not given the negotiating flexibility he feels he needs. I believe it is essential for you to meet with Anderson soon, before conveying your final decisions on negotiating objectives. Under Secretary Irwin and Deputy Secretary Packard, who have been principally involved in this issue, should also be invited to this meeting, as should Deputy Treaty Negotiator John Mundt—who will be carrying out much of the day-to-day negotiations.

We have prepared a brief reply for your signature (Tab A) to Anderson’s letter of April 12 authorizing him to proceed with negotiations with the Panamanians and reassuring him of your confidence in his success. The letter does not address detailed negotiating goals and objectives, which are included in a suggested NSDM (Tab B). The letter and the NSDM would be transmitted after your meeting with Anderson.

RECOMMENDATIONS:

1. That you agree to receive Ambassador Anderson within the next two weeks, and include Irwin, Packard and Mundt in the meeting.

2. That you sign the letter to Anderson at Tab A.

3. That you sign the NSDM at Tab B.

1. Source: National Archives, Nixon Presidential Materials, NSC Files, Box 792, Country Files, Latin America, Panama, Atlantic-Pacific International Ocean Canal Study Commission, Vol. 1, 1971. Secret; Exdis. Sent for action. President Nixon approved the first three recommendations, but did not agree to a meeting with Anderson. He signed both the letter to Anderson and the NSDM. Nixon wrote across the last page: “No—Haldeman and K[issinger:] 1. Have State handle it. 2. This is typical of type of issues I must not waste my time with.” Attached but not published are Tabs A, D, and E. Tab A is a June 24 letter from Nixon to Anderson; Tab D is an April letter from Anderson to the President; and Tab E is a March 1 letter from Nixon to Anderson. Not attached are Tabs B, an early draft of NSDM 115, and G, a Summary of Agreed Negotiating Objectives. NSDM 115, Tab C (the Undersecretaries Committee report), and Tab F (NSDM 64) are published as Documents 549, 547, and 536 respectively.
2. Kissinger summarized the status of Canal treaty negotiations and presented the positions of the Departments of State and Defense and Special Representative for U.S.-Panama Relations Anderson regarding how to proceed and discussed the disagreements between the two agencies. Kissinger then made his recommendations concerning procedures and jurisdiction.